Maynard, MA-based online game company 38 Studios has selected downtown Providence, RI as its new headquarters, the studio confirmed Thursday, lured away from current digs by a loan guarantee worth tens of millions of dollars.
38 Studios, a startup game studio led by former Boston Red Sox star pitcher Curt Schilling, is currently developing an MMO codenamed Copernicus (art pictured). The company has been working on a $75 million loan agreement with the state of Rhode Island as part of an economic development plan for the state.
Part of the agreement entailed that the studio choose a new location in Rhode Island before November 30 this year, and sign a 10-year enforceable lease to ensure the company stays in the state.
Jen MacLean, CEO of 38 Studios said that Providence is an appealing location as it has "some of the best students in the nation, a vibrant arts community, and a dynamic urban environment with easy access to public transportation."
But the main driver for the relocation is the loan guarantee that comes with the move. A recent report said that the company will receive $64 million of the loan guarantee if it attracts 250 full-time jobs to the state by the end of 2011.
As part of the agreement, the state plans for 38 Studios to create even more jobs through 2012. "38 Studios presents Rhode Island with a tremendous economic development opportunity," said Governor Donald L. Carcieri. "This investment creates 450 high-paying jobs, provides job opportunities for our college graduates in a fast growing industry, and will attract other interactive and entertainment companies to Rhode Island."
The new location is a six-story, 104,000-square-foot building located at One Empire Plaza in downtown Providence.
Daniel Baudouin, executive director with The Providence Foundation, said he expects the new game studio to provide a "significant economic boost to downtown, the city and the state." He believes 38 Studios is just the beginning of a greater digital media presence in the city.
"In addition to the high paying jobs and disposable income that 38 Studios will produce, their downtown location should result in the development of a strong, growing cluster of businesses in digital media and design, two potential targets of growth for downtown and the state," he added.
While Rhode Island's governor, economic development groups and 38 Studios are celebrating the deal, the amount of the loan agreement has raised eyebrows from some political candidates in both Rhode Island and Massachusetts in recent months.
Massachusetts independent candidate Tim Cahill said in July that the loan was "an extraordinary amount of money," adding, "I don't think as a matter of policy it's a good idea to give tax credits to individual companies betting on their success."
Former Republican U.S. senator and Rhode Island independent gubernatorial candidate Lincoln Chaffee called the unsecured loan an "unacceptable gamble to ask the taxpayers of Rhode Island to take." The company has until November of 2020 to pay back the loan before forfeiting a final $7 million in payouts.